SecondMarket is hosting a half-day conference on the shadowy world of private stock trades–the sale of investor and employee shares in companies that have not gone public yet–in San Francisco right now. The conference spans the virtues of the secondary market vs. going public, the legal issues involved and how SecondMarket conducts business generally.
Big names like Facebook and Twitter get all the attention when their shares trade on secondary markets. But New York VCs are actively encouraging their smaller portfolio companies to make use of platforms like SecondMarket and Sharepost.
“When this activity first started to appear two years ago, a lot of investors said the sky was Read More
SecondMarket, the web-based trading platform for alternative assets, released a very positive Q1 report today! The service gained more than 18,000 participants in the first quarter, surpassing 50,000 participants–a 52 percent increase quarter-on-quarter and 152 percent increase over the past six months, the company said. And based on first-quarter results, SecondMarket could be on track to broker more than $1 billion in private company shares in 2011.
One of the most interesting and tectonic shifts in the world of tech start-ups has been the emergence of robust markets for buying and selling private shares.
The SEC’s announcement last week that it is was considering relaxing the rules around private shares was met with strong reaction from the VC community.
New York investor Roger Ehrenberg penned a post this morning for Fortune arguing that the private markets were in need of some rationality.
News broke this morning that the SEC is thinking about relaxing the limit that keeps private companies from having more than 500 shareholders. It’s a move that would reshape the tech world, making it possible for companies to significantly delay their IPOs by relying on a broad pool of wealthy individuals to provide them capital to grow. It’s troubling as well, since it would mean more small investors putting money into firms that don’t make their financials public.
“Just because you can afford a car, doesn’t mean you know how to drive one,” quipped Larry Lenihan, CEO of First Mark Capital and a board member at SecondMarket, in a call this morning.
The sale of private shares is shaking up the tech market and helping hot companies prolong their pre-IPO honeymoons. News broke last week about SecondMarket’s
ambitious plans to add 12,000 private companies to its portfolio of offerings, expanding beyond consumer internet companies like Facebook and Twitter which have garnered it attention from the press and SEC.
In fact, Betabeat has learned, one of the most significant players in the financial world has already begun testing the waters. Stake in PIMCO, the closely-watched asset manager with over $1.2 trillion under its control, has been quietly selling on SecondMarket, according to a source familiar with the deals.